Can a Verbal Job Offer Hold Up Legally Without Written Documents? Seeking Advice

Dear Seniors,

Please let me know how we can proceed legally in the absence of an offer letter and appointment letter. Can a verbal contract of employment legally stand?

Thanks,
Prachi

It's always wise to have a contract of employment as this will safeguard your interests as an employee. Even if you don't have an offer letter, it's still fine, but you must have an appointment letter covering a few important terms of employment:

1. Your nature of work.
2. Salary to be paid to you and the date of the salary day.
3. Your leave/medical entitlements.
4. Deductions to be made from your salary.
5. Your official work hours.

Having an official letter from your employer is a legal requirement.

Regards, Ravin

In the unorganized sector, such as shops, establishments, hotels, etc., it is generally not common for employers to issue written appointment orders to newly employed employees at the time of their joining or thereafter. In such cases, there exists an implied contract of employment between the employer and employee. Of course, when any dispute arises between the parties regarding the employment itself, it must be established through other documentary evidence such as wage slips, service cards, and similar documents in the possession of the employee.

Dear Umakanthan Sir,

Could you please clarify if it is legally mandatory to execute the contract of employment, such as the appointment letter and terms of employment defined therein? Is there any section or clause that states the appointment letter must be executed with regard to newly employed individuals? Are there any relevant case laws on this matter?

Thank you.

Contract Act of 1872 and Employment Agreements

Please refer to the Contract Act of 1872 for the employment agreement. Unless the terms are documented, it is very difficult for either party to prove that the other party has not complied with the terms and conditions of the employment agreement. That is why it is a general practice to issue an appointment letter.

Legal Requirement for Employment Contracts

Please clarify: Is it legally mandatory to execute the contract of employment, such as the appointment letter and the terms of employment defined therein? Is there any section or clause which states that an appointment letter must be executed in relation to a newly employed individual? Or is there any case law regarding the same?

Thank you.

Dear Prashanth and the anonymous friend,

As far as I know, no Indian Labour Law other than the Sales Promotion Employees (Conditions of Service) Act, 1976, makes it mandatory for the employer to issue a letter of appointment to his employees [Sec. 5 of the SPE(CS) Act, 1976]. If I am correct, there is no mention of a formal appointment order even in the Industrial Employment (Standing Orders) Act, 1946, or the Model Standing Orders given under the Rules.

Prashanth, it is correct that the contract of employment is also a contract as defined under the Indian Contract Act, 1872. But a contract under the Contract Act also need not necessarily be in writing except in the case of the absence of consideration.

Dear Friend,

You can issue a letter of appointment with terms & conditions to your employees as per the requirement of the organization. Doing so will help you handle retrenchment & termination upon completion of terms or non-renewal of a contract.

Dear all,

There are many organizations here that are openly operating without adhering to labor laws compliance. No PF, no ESI, no statutory bonus, no appointment letter—nothing. Despite this, no action is being taken against such organizations by the labor laws department.